Hence, future capex needed for this wound-up AV Bus business, and that of the U.S. Marine business will be avoided. In the six years since 2016 when we started our portfolio rationalisation, we have divested or closed 16 businesses including these two. As the operating environment for each line of business evolves, we will continue to prioritise businesses that play to our strengths, are attractive and are scalable. This way, our portfolio will be highgraded and will remain resilient in generating value for shareholders, customers and employees alike. Innovation culture to sustain technology and engineering core. As a technology, defence and engineering Group, we understand the need to sustain our technology and engineering core and we have committed to invest up to 5% of our annual revenue on R&D, of which up to 75% will be spent on digital technologies. In addition, we continue to strengthen our engineering talent pool, attracting and recruiting the best in our journey to build a world-class team. For years, we have been driving innovation, establishing strategic collaborations, and sustaining an innovation culture that helps our engineers to expand their competencies as part of their professional development. We have an integrated framework on how we think about innovation. This framework can take numerous forms and produces an array of outcomes. In providing a failuretolerant space, our employees and engineers can better experiment, harness their creativity, and redefine boundaries. It is also in We will continue to prioritise businesses that play to our strengths, are attractive and are scalable. these spaces that we can unleash and take advantage of our collective genius. In line with this, we have numerous innovation awards to recognise our employees and to encourage them to innovate. The Best-of-Best Continuous Improvement Awards seek to showcase the most outstanding improvements to work processes and drive cost efficiencies and excellence in whatever we do. The InnoChamp Awards recognise teams behind products, services, or business ideas that have been successfully launched within the last 12 months, while the In.Vent Awards focus on new venture innovations where teams are assessed on customer desirability, technical viability and business feasibility. 2022 FINANCIALS: STRONG RECOVERY IN UNDERLYING OPERATING PERFORMANCE ST Engineering posted a 17% year-on-year (y-o-y) increase in Group revenue to $9.0b from $7.7b. Group EBIT improved 9% y-o-y to $735m from $674m despite a reduction of $203m in government support1. On a base operating performance (BOP) basis, excluding government support, energy inflation impact and TransCore transaction and integration (T&I) expenses, as well as the positive impact of a pension restructuring cost savings, Group EBIT increased by 55% y-o-y to $727m. This result was achieved through cost saving initiatives and business growth. Group PBT was $597m, down 6% y-o-y from $638m and Group Net Profit was $535m, down 6% y-o-y from $571m, largely due to the virtual absence of government support in 2022. On a BOP basis, Group PBT and Group Net Profit each grew by close to 40%, on the back of cost saving initiatives and business growth. Commercial Aerospace, Urban Solutions & Satcom and Defence & Public Security accounted for 33%, 20% and 47% of revenue respectively. By geography, customers from Asia, including Singapore accounted for 50% (compared to 58% in 2021), while customers from the U.S. and Europe accounted for 25% and 18% (was 20% and 16% respectively in 2021). The remaining 7% customers were 1 All mentions of government support refer to COVID-19 related government support only CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 07
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